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23–143 PDF 2005

ONE YEAR LATER: EVALUATING THE

EFFECTIVENESS OF PROJECT BIOSHIELD

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JULY 14, 2005

Serial No. 109–59

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

(III)

C O N T E N T S

Page

Hearing held on July 14, 2005 ............................................................................... 1

Statement of:

Kramer, Robert G., president and chief executive officer, BioPort Corp.;

Richard B. Hollis, chairman and chief executive officer, Hollis-Eden

Pharmaceuticals; and Gerald L. Epstein, senior fellow for science and

security, Homeland Security Program, Center for Strategic and International Studies ............................................................................................ 73

Epstein, Gerald L. ..................................................................................... 96

Hollis, Richard B. ...................................................................................... 84

Kramer, Robert G. ..................................................................................... 73

Simonson, Stewart, Assistant Secretary, Office of Public Health Emergency Preparedness, U.S. Department of Health and Human Services;

Anthony S. Fauci, M.D., Director, National Institute of Allergy and

Infectious Diseases, National Institutes of Health; and John Vitko,

Jr., M.D., Director, Biological Countermeasures Portfolio, Science and

Technology Directorate, Department of Homeland Security ..................... 12

Fauci, Anthony S. ...................................................................................... 30

Simonson, Stewart .................................................................................... 12

Vitko, John Jr. ........................................................................................... 50

Letters, statements, etc., submitted for the record by:

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 128

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Epstein, Gerald L., senior fellow for science and security, Homeland

Security Program, Center for Strategic and International Studies, prepared statement of ........................................................................................ 99

Fauci, Anthony S., M.D., Director, National Institute of Allergy and Infectious Diseases, National Institutes of , prepared statement of ................. 32

Hollis, Richard B., chairman and chief executive officer, Hollis-Eden

Pharmaceuticals, prepared statement of .................................................... 86

Issa, Hon. Darrell E., a Representative in Congress from the State of

California, prepared statement of ................................................................ 122

Kramer, Robert G., president and chief executive officer, BioPort Corp.,

prepared statement of ................................................................................... 76

Maloney, Hon. Carolyn B., a Representative in Congress from the State

of New York, prepared statement of ........................................................... 125

Porter, Hon. Jon C., a Representative in Congress from the State of

Nevada, prepared statement of .................................................................... 124

Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the

State of Maryland, prepared statement of .................................................. 132

Shays, Hon. Christopher, a Representative in Congress from the State

of Connecticut, prepared statement of ........................................................ 120

Simonson, Stewart, Assistant Secretary, Office of Public Health Emergency Preparedness, U.S. Department of Health and Human Services,

prepared statement of ................................................................................... 15

Vitko, John Jr., M.D., Director, Biological Countermeasures Portfolio,

Science and Technology Directorate, Department of Homeland Security,

prepared statement of ................................................................................... 53

Waxman, Hon. Henry A., a Representative in Congress from the State

of California, prepared statement of ........................................................... 8

(1)

ONE YEAR LATER: EVALUATING THE

EFFECTIVENESS OF PROJECT BIOSHIELD

THURSDAY, JULY 14, 2005

HOUSE OF REPRESENTATIVES, COMMITTEE ON GOVERNMENT REFORM, Washington, DC.

The committee met, pursuant to notice, at 11:30 a.m., in room

2154, Rayburn House Office Building, Hon. Tom Davis (chairman

of the committee) presiding.

Present: Representatives Davis of Virginia, Shays, Waxman,

Issa, Foxx, Maloney, Cummings, Kucinich, Davis of Illinois, Clay,

Watson, Van Hollen, Ruppersberger, and Norton.

Staff present: Melissa Wojciak, staff director; David Marin, deputy staff director/communications director; Keith Ausbrook, chief

counsel; Rob White, press secretary; Drew Crockett, deputy director

of communications; Edward Kidd and Susie Schulte, professional

staff members; John Brosnan, GAO detailee; Teresa Austin, chief

clerk; Sarah D’Orsie, deputy clerk; Kristina Sherry, legislative assistant; Leneal Scott, computer systems manager; Josh Sharfstein,

minority health policy advisor; Robin Appleberry, minority counsel;

Earley Green, minority chief clerk; and Jean Gosa, minority assistant clerk.

Chairman TOM DAVIS. The committee will come to order. I want

to welcome everybody to today’s oversight hearing to assess the implementation of Project BioShield thus far. The purpose of this

hearing is to consider whether the Project BioShield program is

being adequately implemented to accelerate the research, development and purchase of effective countermeasures against agents of

bioterrorism.

Now that the Department of Health and Human Services has

begun to utilize its special authorities granted by Congress through

the Project BioShield Act of 2004, the committee feels it is time to

review how these authorities are being executed. Specifically, the

committee will consider whether adequate medical countermeasures to protect our population against a biological attack are

being procured.

As we tragically learned during the fall of 2001, our Nation is

vulnerable to biological terrorism. Letters laced with anthrax

caused the deaths of five individuals. Thousands more had to be

treated. The death toll could have been higher if there had not

been effective countermeasures to treat that particular form of anthrax.

The Project BioShield Act of 2004 gave the Federal Government

better tools to develop and purchase vaccines and other drugs to

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protect Americans in the event of bioterrorist attacks. If the United

States were to be attacked with these deadly pathogens, the need

for the corresponding vaccines, tests and treatments would be

widespread and immediate.

The Government has made some progress over the past year in

implementing the BioShield program and improving preparedness

efforts against bioterrorism. To date, DHS and HHS have determined that anthrax, botulinum toxins, smallpox and radiological

and nuclear agents pose a significant material threat to Americans

and to U.S. national security. Health and Human Services has solicited and awarded contracts for medical countermeasures against

these threats.

In November 2004, HHS awarded a contract to VaxGen for up

to 75 million doses of a new generation anthrax rPA vaccine, and

in May awarded a contract for 5 million doses of the existing FDAlicensed anthrax vaccine produced by BioPort Corp. Additionally,

HHS awarded a contract for pediatric potassium iodide in March

of this year for inclusion within the Strategic National Stockpile.

But in spite of these efforts, there remains some concern as to

HHS’s moving too slowly to award contracts. Among the questions

we are going to ask today: How do we prepare against the threat

of bioterrorism while waiting for new countermeasures to be researched and developed? Are we adequately linking threat assessments to the procurement of appropriate countermeasures? And

most importantly, are we safer now than we were before BioShield

was enacted?

Witnesses on our second panel are going to express their concerns over the transparency of the solicitation process and whether

companies are fully aware of how they are being evaluated and

what certain terms and criteria are considered when HHS responds

to a solicitation. We will also hear concerns about whether the implementation of BioShield is working to erase barriers to entry to

the bio-defense market and if more incentives are needed.

I look forward to a robust discussion on whether the procurement

of medical countermeasures to date has been sufficient and how

best do we work toward improvements necessary for even greater

preparedness.

Project BioShield needs to work. It was crafted so that the

United States could better harness the power of the commercial

marketplace to protect our citizens against threats, whether they

be nuclear, biological or radiological, or whatever.

Just 1 week after terrorists detonated four bombs in the heart

of London, taking the lives of more than 50 people, no one should

need a reminder of how real these threats are. Anyone who has

read the 9/11 Commission report or who has been listening to the

experts who have studied these issues in depth can’t help but understand this.

I want to show a short video that is illustrative.

[Video shown.]

Chairman TOM DAVIS. The only drug we have right now is potassium iodide in case of a nuclear attack. But we need the development of better, next generation treatment of drugs and where are

we?

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This is not an academic exercise. Project BioShield was conceived

to help us face the most pressing threats facing our Nation today,

and we need it to live up to that promise. There was a consensus

in the Presidential race that this is an area we need to proceed in.

And yet to date we have not seen the kind of progress, I think, that

the act wanted and that Congress demands and the American people need.

We have a great selection of witnesses today and I look forward

to their testimony. But before that, I would like to recognize our

distinguished ranking member, Mr. Waxman, for his opening statement.

[The prepared statement of Chairman Tom Davis follows:]

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Mr. WAXMAN. Thank you very much, Mr. Chairman.

I think we owe it to our audience to explain that we were late

in coming to the hearing today partly due to the chairman’s efforts

because there was a vote on the House floor where almost all of

the Members had voted aye, the chairman was among a few that

voted no. When people looked and saw his ‘‘no’’ vote, little by little

they changed their aye to no, and the matter that was on the floor

ready to pass was defeated. So the chairman is clearly a very

strong leader, both on the House floor and in this committee.

Chairman TOM DAVIS. You can have as much time as you want

today, Mr. Waxman. [Laughter.]

Mr. WAXMAN. One year ago, Congress passed legislation to establish Project BioShield. This important program seeks to encourage

private companies to develop innovative drugs, vaccines and other

measures to address bioterrorist threats. The plan is for these

products to be delivered to the American people in an emergency

by a fully functional public health system. Today’s hearing is an

opportunity to assess how Project BioShield is working. It is also

an opportunity to ask whether the rest of our public health system

is prepared to do its part of the job.

The answer is not encouraging. While Congress has provided

guaranteed funding for BioShield, the administration has repeatedly shortchanged core public health services. This failure threatens our ability to respond to serious biological threats, whether

natural or man-made.

Two weeks ago, our committee learned that the United States is

unprepared for a flu pandemic which could claim as many as

500,000 American lives. Unlike other nations, our plan to respond

to a flu pandemic is not finalized. We have not purchased the antiviral medication we need. We do not have adequate supplies of vaccine. And yet the administration has refused to admit the obvious:

extra funding is needed to do the right job.

There are also large gaps in our state of preparedness for a bioterrorist attack. Only a handful of States have the capacity to deliver essential medications and vaccines contained in the Strategic

National Stockpile to their citizens. There is no point in having a

new anthrax vaccine or nerve gas antidote if the people whose lives

are at risk cannot obtain treatment in time.

But rather than shore up the system to deliver these products,

the administration has proposed cutting $130 million from State

and local health departments. While BioShield offers promise for

the future, the administration’s chronic under-funding of public

health is risking our ability to respond to a crisis in the meantime.

The only maker of the current smallpox vaccine in the United

States may close its production facility because the administration

is failing to invest in ongoing production capacity. Similarly, the

only maker of a licensed anthrax vaccine has said it may be forced

to close its doors without a Government contract to keep its machines running.

Until new and improved products are actually available, it makes

no sense to lose access to current products that are protecting the

American people.

The weaknesses in the public health system are even undermining the ability of Project BioShield to succeed in developing new,

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cutting edge products. In announcing the President’s proposal, the

White House stated that Project BioShield would ‘‘ensure resources

to develop next generation countermeasures.’’ The proposal was

billed as a measure to speed research and develop medical countermeasures based on the most promising recent scientific discoveries.

But the latest BioShield contract uses more than $120 million for

the procurement of an anthrax vaccine that was licensed in 1970,

35 years ago.

Now, let me be clear. I am not against, in fact I do support the

purchase of existing anthrax vaccine. But such a purchase should

be made with public health funds, not with the special pool of resources set aside by Congress to encourage research into groundbreaking new products.

BioShield was supposed to be a shot in the arm for public health

readiness, but it is being used as a crutch. Today we will discuss

some of the nuts and bolts of BioShield. There are important questions about how the program is working to encourage new products, balancing the needs of business with responsibility to the taxpayer.

We shouldn’t lose sight of what BioShield is all about: a safer

America. We need not only a better BioShield but also a system

that can support and deliver the best possible response to public

health emergencies. We must demand that the administration and

Congress put all the resources that are necessary into this effort.

I am pleased that some of our Nation’s leaders in public health

preparedness are here today. I want to thank them for their efforts

on behalf of the American people. I look forward to all of the testimony from today’s witnesses.

[The prepared statement of Hon. Henry A. Waxman follows:]

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Chairman TOM DAVIS. Thank you.

I want to again thank everybody for your patience in being with

us today. We had some votes right after 10 a.m., and as Mr. Waxman alluded, one vote took a little longer than normal. I am not

sure that it was my stellar ‘‘no’’ vote up there that switched everybody else, but about 100 Members came in, I think they read the

amendment after they voted and decided to switch.

Members will have 7 days to submit written statements. Is there

anyone else who wants to make an opening statement? Without objection, they will all be in the record.

We have today the Honorable Stewart Simonson, the Assistant

Secretary for Public Health Emergency Preparedness, Department

of Health and Human Services; Dr. Anthony Fauci, the Director of

the National Institute of Allergy and Infectious Diseases, National

Institutes of Health; and Dr. John Vitko, the Director of Biological

Countermeasure Portfolio, Science and Technology Directorate, Department of Homeland Security.

It is our policy, as you know, we swear you in before you testify.

So if you would just rise and raise your right hands.

[Witnesses sworn.]

Chairman TOM DAVIS. Mr. Simonson, we will start with you and

we will move straight down. Your entire statement is a part of the

record, and our questions are based on your entire written testimony. Thanks for your patience.

STATEMENTS OF STEWART SIMONSON, ASSISTANT SECRETARY, OFFICE OF PUBLIC HEALTH EMERGENCY PREPAREDNESS, U.S. DEPARTMENT OF HEALTH AND HUMAN

SERVICES; ANTHONY S. FAUCI, M.D., DIRECTOR, NATIONAL

INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTES OF HEALTH; AND JOHN VITKO, JR.,

M.D., DIRECTOR, BIOLOGICAL COUNTERMEASURES PORTFOLIO, SCIENCE AND TECHNOLOGY DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY

STATEMENT OF STEWART SIMONSON

Mr. SIMONSON. Good morning, Chairman Davis, Representative

Waxman, and members of the committee. I am Stewart Simonson,

Assistant HHS Secretary for Public Health Emergency Preparedness. I appreciate the opportunity to share with you information on

the Department’s progress in implementing the Project BioShield

Act of 2004 and our coordination with our colleagues at the Department of Homeland Security.

The events of September and October 2001 made it very clear

that terrorism is a serious threat to our Nation and the world. The

Bush administration and Congress responded forcefully to this

threat by strengthening our medical and public health capacities to

protect our citizens from future attacks. To encourage the development of new medical countermeasures against threat agents and to

speed their delivery, President Bush in his 2003 State of the Union

Address proposed, and Congress subsequently enacted, Project BioShield.

The $5.6 billion, 10 year special reserve fund was created to assure developers of medical countermeasures that funds would be

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available for the Government to purchase critical products. Since

enactment, my office has moved aggressively to fill immediate gaps

in our countermeasure armamentarium. A genuine sense of urgency informs all of our homeland security work at HHS.

But it is important to note that successful development and the

manufacturing of safe and effective countermeasures requires an

investment of both money and time. No matter how hard we try,

some steps in the process cannot be rushed.

There is a complex spectrum of efforts needed along the research

and development pipeline to produce a usable medical product. Defining specifications for needed countermeasures often reveals few

if any candidates in the pipeline. Today, we have been fortunate

that some of our highest priority needs for medical countermeasures could be addressed using the available advanced development products already in the pipeline.

However, research and development efforts, even when robustly

funded, often take years before the concept is mature enough for

advanced development. It is only when a product has reached the

advanced development stage that Project BioShield provides a

meaningful incentive for manufacturers to take the product the

rest of the way.

In determining the requirements and evaluating options for medical countermeasure acquisitions, the focal point for the U.S. Government interagency effort is the Weapons of Mass Destruction

Countermeasure Subcommittee. HHS, along with representatives

from the Department of Homeland Security, the Department of Defense, chair of the WMD Subcommittee, and stakeholders from

throughout the U.S. Government are represented on its working

groups.

In setting priorities for medical countermeasure acquisition

under Project BioShield, the WMD Subcommittee considers a number of factors: the credibility and immediacy of specific threats are

driving factors and are informed by material threat assessments

conducted by DHS. My colleague, Dr. John Vitko, here today, representing DHS, can provide insight into the assessment process.

We also consider the current and projected availability of appropriate medical countermeasures, as well as the target population

for which the countermeasure would be used. In addition, logistical

issues are considered, such as the feasibility of deployment in a

public health emergency, shelf life and storage, and maintenance

requirements.

Project BioShield requires a number of findings by the Secretaries of Homeland Security and HHS prior to an acquisition commencing. These findings include three determinations: first, that

there is a material threat against the U.S. population sufficient to

affect national security; second, that medical countermeasures are

necessary to protect the public health from that material threat;

and third, that acquiring a specific quantity of a particular medical

countermeasure using the special reserve fund as appropriate.

These determinations are followed by a joint recommendation for

an acquisition that is presented to the White House by the two Secretaries. If approved, Congress is notified, HHS executes the acquisition program. The process that I have outlined for you has been

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successfully implemented three times since the enactment of

Project BioShield nearly a year ago.

HHS has completed contract awards for acquisitions of the next

generation recombinant protective antigen anthrax vaccine, the

current generation licensed anthrax vaccine and the pediatric formulation of potassium iodide. Additionally, the acquisition process

is in the final stages for several other needed medical countermeasures, including anthrax therapeutics, botulinum antitoxin and

a next generation smallpox vaccine.

This robust interagency process mines the expertise of subject

matter experts in the scientific and intelligence community to define requirements for medical countermeasures and enables policymakers to identify and evaluate acquisition options to address immediate and future needs.

In closing, let me say that HHS has a clear mandate from President Bush and Congress to lead the charge in countermeasure development. We have already made important strides to address the

public health needs of the Nation, but more needs to be done.

Chairman Davis, I look forward to working with you and Congressman Waxman and the rest of the committee to address the

challenges of CBRN preparedness and its impact on public health.

I would be glad to answer any questions.

[The prepared statement of Mr. Simonson follows:]

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Chairman TOM DAVIS. Thank you, Mr. Simonson.

Dr. Fauci, thanks for being with us.

STATEMENT OF ANTHONY FAUCI, M.D.

Dr. FAUCI. Mr. Chairman, members of the committee, thank you

for giving me the opportunity to discuss with you this morning the

role of the NIH research enterprise in providing the basic and applied research for the development of countermeasures, some of

which may ultimately go into the procurement process of BioShield;

in addition, to mention to you some of the advantages that we have

now for the ability to expedite our research through some of the

BioShield provisions.

As shown on this first visual, you can see the covers of some of

the printouts of the web-available strategic plan for biodefense research at the NIH, as well as the research agendas for the Category A and B agents. We drew this up when I testified before several committees as to the importance of having a well thought out

strategic plan in the research arena, and since then, we have

progress reports for the Category A as well as for the Category B

and C agents.

Next slide, please. Importantly, and as mentioned in the video

you showed, and in your own opening statements, we also have an

important responsibility for developing countermeasures for radiological and nuclear threats. We have a strategic plan and research

agenda that has just recently, within the past few weeks, been published. By the end of the year, we will have a similar plan for medical countermeasures against chemical threats.

Next visual, please. This slide summarizes some of the key

achievements in the development of biodefense countermeasures,

some of which are already in the procurement process, as mentioned by Mr. Simonson, some of which are in the queue for that,

and others may become eligible should the material threat assessment indicate that this is the case. Importantly, with regard to

smallpox, we now have, as mentioned, 300 million doses in our

Strategic National Stockpile, and research is now on one of the

components which is much less toxic, in the sense of less adverse

events. That is modified vaccinia Ankara, in addition to anti-viral

drugs.

With regard to anthrax, there is the recombinant protective antigen as well as research on antitoxins, botulism vaccine, research

and development, as well as a variety of monoclonal antibodies and

polyclonal antibodies against a variety of the subtypes of botulism

toxin. And finally Ebola, we have conducted the first human vaccine trial for the development of an Ebola vaccine.

Next slide, please. With regard to the authorities that we now

have to expedite research, we have been able to hire several high

level members of our team now, particularly those who have experience in advanced development, which was one of the gaps we

had, since we generally do not push products all the way through

to advanced development. We expected the hiring of these through

the BioShield provisions.

In addition, we have been able to expedite the awarding of

grants and contracts, such as listed on this slide, by truncating the

time from generally about 18 months to now between 6 and 8

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months, shown here for therapeutics, antibodies protecting against

botulism, as well as vaccine candidates against one type of botulism toxin.

Next slide, please. In the future, we will continue to use these

BioShield authorities, some of which relate to the points you made

in your statement, such as protecting the immune system against

radiation by a number of protectants, as well as chelating agents,

as shown in bullet No. 2, in addition to developing a variety of assays for other therapeutics.

On this final slide, it is a busy slide, and I know it is difficult

to read. But the effect I want to bring up to you is that there are

a number of candidates for biodefense countermeasures that are in

the pipeline. What I have shown here is that if you look at the left

of the slide, which is the purple bars indicating the research that

we do, and if you go to the right, the orange boxes are what I

would call BioShield eligible, not necessarily that it will be procured for BioShield, but that it would be advanced enough that

there could be a procurement contract.

So what we generally do is the research and usually the NIH’s

role is to not push so far to the right in advance development.

Chairman TOM DAVIS. I hate to interrupt. Are any of these applicable to a nuclear attack?

Dr. FAUCI. Right now, the ones that we have there on this particular one are not, because we have, the nuclear component of it

is still very much in what is already in the stockpile and the research is to get those licensed for the use for the civilian population. So we have a number of things in the stockpile.

The critical issue is that we are much more on the research side

of new countermeasures for radio protectants, as well as for stem

cell and other immune reconstitution. The reason they are not up

there, Mr. Chairman, is that they haven’t yet gotten to the research level to get there. We have dealings now, interactions with

industry and we are trying to partner in the development of some

products that have already been developed that could go into there.

But there is none right there on that slide that show for nuclear.

But importantly, what we need to do is the greater partnership

that you alluded to in your statement with industry to push these

products through the advanced development. There has been referral to this in the situation where there are some gaps there. These

are gaps that we are aware of and that we really need to fill. The

basic research we do, and we can do well. The critical issue is how

we get the push that we give from the research side to meet the

pull that we can get from the BioShield side in order to get those

products to be in our national stockpile ultimately for the protection of our Nation.

Thank you, Mr. Chairman. I would be happy to answer questions

during the question period.

[The prepared statement of Dr. Fauci follows:]

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Chairman TOM DAVIS. Thank you.

Dr. Vitko.

STATEMENT OF JOHN VITKO, JR.

Dr. VITKO. Good afternoon, Congressman Davis, Congressman

Waxman and distinguished members of the committee. I am

pleased to appear before you today to discuss the Department of

Homeland Security’s efforts in Project BioShield implementation,

including the development of threat and risk assessments that help

inform and priorities BioShield research, development and procurement, as well as our close coordination with the Department of

Health and Human Services throughout the process.

I will begin with a description of coordination between DHS and

HHS on near-term implementation of BioShield and then move on

to three major activities to support and guide future BioShield acquisitions: risk assessments across a broad set of biological agents,

a strategy for addressing the engineered threat, and scientific research to reduce key uncertainties in these risk assessments.

The Project BioShield Act of 2004 charges the Secretary of Homeland Security with the responsibility to determine which biological,

chemical, radiological and nuclear threats constitute a material

threat to our Nation’s security. To fulfill this responsibility, the

DHS Science and Technology Directorate, in partnership with our

Information Analysis and Infrastructure Protection Directorate,

has been conducting formal threat assessments of the agents of

greatest concern to establish plausible high consequence scenarios.

These assessments combine intelligence information with technical assessments of the feasibility of a terrorist to produce and disseminate the agent, to provide an indication of the number of exposed individuals, the geographical extent of the exposure and

other collateral effects. If these consequences are of such a magnitude to be of significant concern to our national security or public

health, the Secretary of DHS then issues a formal material threat

determination to the Secretary of HHS, which initiates the BioShield process.

HHS, assisted by the Interagency Weapons of Mass Destruction

Medical Countermeasures Subcommittee, then determines the need

for and requirements of any new medical countermeasures. Any

recommendations issued for the acquisition of a specific countermeasure are evaluated through an interagency process and form

the basis of the U.S. Government requirements.

After approval of these requirements by the Office of Management and Budget, HHS issues a request for proposals and implements and manages the subsequent acquisition process through the

delivery of the countermeasures to the Strategic National Stockpile. As described above, the normal process is to have an in-depth

threat and risk assessment precede the material threat determinations.

However, four threats were recognized to be of such urgency that

the Secretary of DHS issued material threat determinations for

them soon after the enactment of BioShield legislation and concurrently initiated in-depth assessments of plausible high consequence

scenarios to better inform procurement requirements. These four

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threats are anthrax, smallpox, botulinum toxin and radiological

and nuclear devices.

Subsequently, full assessments have been performed on anthrax

and botulinum toxin and radiological devices and a special study

conducted on fissile materials, i.e., nuclear weapons. HHS has

moved out promptly in addressing these threats with contracts in

place for first and second generation anthrax vaccines and a pediatric formulation of potassium iodide. HHS is also in the acquisition process for botulinum toxin, anthrax therapeutics and the next

generation of smallpox vaccines and has issued a number of requests for information for other medical countermeasures.

We at DHS are currently addressing the next tier of threats. Assessments are nearly complete for plague, tularemia and chemical

nerve agents. An assessment of viral hemorrhagic fevers will be

completed this fiscal year. Based on the outcomes of these assessments, the Secretary of DHS may issue additional material threat

determinations.

The threat assessments and procurement actions discussed above

focus on those CBRN agents widely agreed to be of greatest concern since the near-term BioShield processes. We are also conducting three key activities to guide future rounds of BioShield acquisitions. As part of our responsibilities under the President’s strategy

for biodefense for the 21st century, we are conducting a formal risk

assessment across a broad range of biological threats, including all

Category A and B agents from the Centers for Disease Control and

Prevention threat list, some Category C agents and a number of

potential engineered threats.

These risk assessments factor in technical feasibility producing

and disseminating the threat, the vulnerability of different portions

of our society to those threats, and the resulting consequences of

any such attack. Looking still further into the future, we have

partnered with HHS and others in formulating and implementing

a strategy for anticipating and responding to engineered threats.

Together, we have developed an informed estimate of the types of

emerging threats that might be within the ability of a terrorist organization to develop over the near, mid and longer terms, and

have laid out a strategy for addressing them.

Realizing that there are still large uncertainties, sometimes factors of 10 to 100, in some of the key parameters underlying these

threat and risk assessments, we have established a National Biodefense Analysis and Countermeasures Center [NBACC], to conduct the laboratory experiments needed to reduce these uncertainties. Pending the completion of construction of the associated facility on the Fort Detrick campus in 2008, interim capabilities have

been established with other Government and private laboratories

to begin this vital work.

In summary, DHS science and technology threat and risk assessments play a critical role in prioritizing BioShield acquisitions.

Throughout the process, we have worked closely with our colleagues at HHS to most effectively couple DHS expertise on the

threat and risk with HHS expertise on human health to better protect the Nation.

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This concludes my prepared statement. Mr. Chairman, Congressman Waxman, and members of the committee, I thank you for the

opportunity to appear before you. I will be happy to answer any

questions that you may have.

[The prepared statement of Dr. Vitko follows:]

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Chairman TOM DAVIS. Thank you very much.

Mr. Simonson, I am going to start with you. One of the chief purposes of the Project BioShield Act was to enable the Government

to more rapidly acquire countermeasures against biological, chemical, radiological or nuclear agents that might be used in terrorist

attacks. The administration has identified the following agents for

which countermeasures are needed to protect the public health: anthrax, smallpox, botulism toxin, plague and Ebola.

Has the Department of Health and Human Services used any of

the special acquisition flexibilities contained in the act, such as the

enhanced simplified acquisition authority and expanded sole source

authority for BioShield procurement conducted to date?

Mr. SIMONSON. No. Our view has been that we wanted to, where

possible, compete in full and open competition to keep the price

down for these drugs. So to date, we have not had a need to use

those authorities.

Chairman TOM DAVIS. I understand that you have issued a request for information for drugs that might prove effective in treating acute radiation exposure and radiation sickness and that you

have announced the intention to issue a draft RFP for this purpose

by the end of the month, is that correct?

Mr. SIMONSON. Yes.

Chairman TOM DAVIS. I think there remains a concern that this

process of reviewing, procurement and stockpiling effective radiological and nuclear countermeasures will drag on for several more

months. Can you explain why you have chosen a draft RFP instead

of an RFP?

Mr. SIMONSON. It is a way to ensure that the ultimate acquisition is done properly. We issue the draft RFP to give industry an

opportunity to comment on it. I think we have seen in the past that

sometimes when RFPs go out, we are asking for things that we

simply can’t get from industry or we are asking for them in a format that doesn’t work. We have found that the draft RFP mechanism helps us from having to duplicate efforts subsequently, for example, to recall——

Chairman TOM DAVIS. But a regular RFP has to follow that,

right?

Mr. SIMONSON. Oh, yes. But oftentimes the time lines are compressed, leveraging some of the draft RFP time, knowing that

the——

Chairman TOM DAVIS. It reminds me of a friend of mine who was

engaged to be engaged. It was one of those things. I guess it moves

the process down a little bit, but you still have some——

Mr. SIMONSON. Right.

Chairman TOM DAVIS. Well, let me ask you this. Nothing currently exists in the Strategic National Stockpile for radiation protection that addresses acute radiation syndrome.

Mr. SIMONSON. There are things in the Stockpile that do. We

have a number of things in the Stockpile. You mentioned potassium iodide. Our only BioShield acquisition for radiation sickness

is suspension potassium iodide for children.

But in the Stockpile we have and have been building up products

that are used to treat internal radiation exposure, they are called

chelating agents.

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Chairman TOM DAVIS. Dr. Fauci, if you want to join in on this,

because we need to know this.

Mr. SIMONSON. Yes. This is called zinc and calcium DTPA. We

have a drug called Prussian Blue. We have a drug called Nupogen,

which is used to treat acute neutropenia, which is what follows radiation exposure. So we do have Stockpile elements that are responsive to radiation exposure.

We also have a fair amount of what are called burn and blast

provisions to be used.

Chairman TOM DAVIS. But you concede it is not where you want

to be?

Mr. SIMONSON. No, no, absolutely not.

Chairman TOM DAVIS. When do you anticipate actually getting

this new drug developed and stockpiling that? Do you see a time

line? You have this draft RFP that is coming, and you will have

an RFP, and you will get the responses. Do you have any idea what

the time line might be?

Mr. SIMONSON. I can’t give you the exact time line.

Chairman TOM DAVIS. I understand.

Mr. SIMONSON. I will tell you that we want it sooner rather than

later, as fast as possible. But I have to be very careful about entering into an acquisition, I think this committee can be sensitive to

this, where we have a malfunction of the Federal acquisition regulations or something like that, we do it in a very deliberate and

cautious way. I do not think it is overly cautious, however.

Chairman TOM DAVIS. How prepared would we be today if the

recent anthrax incident at the D.C. Postal Service and DOD facilities had been even more widespread, or if an airborne anthrax attack from a small plane were to occur in Metropolitan Washington,

requiring drugs and vaccinations for those exposed and for first responders?

Mr. SIMONSON. We are substantially better prepared than we

were in October 2001. We have enormous quantities of antibiotics

in the Strategic National Stockpile to treat tens of millions of people for full courses of treatment, full 60 day courses of treatment.

We have, under the operation of DHS, a very reliable system for

monitoring exposure, the so-called Biowatch system.

We have 5 million, as you noted, 5 million doses of the currently

licensed anthrax vaccine in the Stockpile. We have an RFP, well,

not an RFP, we are seeking to negotiate an option for an additional

5 million doses of that material. Then we have the contract for 75

million doses of the next generation material, recombinant protective antigen.

Chairman TOM DAVIS. Thank you.

Mr. Waxman.

Mr. WAXMAN. Thank you, Mr. Chairman.

Mr. Simonson, to prepare for pandemic influenza, the administration has purchased 5.3 million courses of the anti-viral drug

Tamiflu for the National Stockpile. Is that enough?

Mr. SIMONSON. No.

Mr. WAXMAN. The administration has purchased 2 million doses

of a vaccine against avian flu to have on hand to vaccinate health

care workers while a pandemic vaccine is manufactured. Is this

enough?

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Mr. SIMONSON. It is enough for the beginning, yes. This was

never meant to be a discrete and final action. This is the beginning

of a program to purchase sufficient quantities of vaccine to enable

us to respond to a pandemic.

I might add that we were the first to do this. Dr. Fauci can comment on this.

Mr. WAXMAN. In terms of making it available to all of our health

care workers, do we have enough?

Mr. SIMONSON. No, but we don’t know enough about the vaccine

to say even how it would be used at this point. There are clinical

studies going on in Dr. Fauci’s lab which will inform that. Again,

we were the first in the world to do that.

Mr. WAXMAN. Only a handful of States have the full capacity to

deploy and distribute the Strategic National Stockpile. Is that

enough?

Mr. SIMONSON. No.

Mr. WAXMAN. The company says it will close the only smallpox

vaccine production facility in the United States if it does not get

a Government contract to maintain its ability to produce the vaccine. Should this facility close down?

Mr. SIMONSON. It is news to me that they are suggesting that.

We are in discussion with them now about the proper way to maintain a warm base at that facility.

Mr. WAXMAN. The company BioPort says it may be forced to close

the only anthrax vaccine production facility in the United States if

it does not get a Government contract to maintain its ability to

produce the vaccine. Should this facility close down?

Mr. SIMONSON. Should it close down? We are not advocating for

it to be closed down, obviously, and we——

Mr. WAXMAN. Would you be concerned if it did, because of the

argument that they don’t have a Government contract to get

enough money to produce the vaccine?

Mr. SIMONSON. As I said, we have made an acquisition of what

we believe our requirement is at this point, 5 million doses of AVA.

We are seeking an option for an additional 5 million doses.

But as you can imagine, in our world, we hear this often: if the

Government doesn’t do this, if the Government doesn’t do that, we

will close down. Frankly, we have to be responsive to what it is

that we need for the Stockpile.

Mr. WAXMAN. Two weeks ago, this committee heard testimony

from Dr. Fauci and Dr. Bruce Gellin that the United States needed

to purchase more courses of the anti-viral drug Tamiflu. So far the

United States has purchased enough for only about 2 percent of the

population, about 5 million courses of treatment.

I have learned that from the company Roche that 7 million

courses of treatment are available for sale from next year’s production. If we need more and more is for sale, why haven’t we ordered

more?

Mr. SIMONSON. Well, I should say that we are in discussion with

Roche about their production capability and what they can provide

us. They are aware of our preliminary plans.

However, it is worth pointing out that much like with the vaccine, we were well ahead of others in buying anti-virals. Other

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countries are often cited as having these enormous anti-viral stockpiles. Few have more than we have right now. We were——

Mr. WAXMAN. But if we have only for 2 percent of the population,

that doesn’t sound right. Would you support the United States purchasing all 7 million available courses of the treatment?

Mr. SIMONSON. We are interested in more Tamiflu.

Mr. WAXMAN. OK. Has the availability of funds in any way hindered your ability to contract for doses of Tamiflu that you believe

are important to protect the American people?

Mr. SIMONSON. I am not aware of a funding constraint at this

point, but I am not a budgetary person.

Mr. WAXMAN. If you have to purchase more Tamiflu and they

want a certain amount of money and you don’t have it, isn’t that

a problem?

Mr. SIMONSON. It is not clear to me that we don’t have it.

Mr. WAXMAN. Oh. OK. Well, we will be interested in hearing

more about that.

The purpose of BioShield is to encourage the development of new

and innovative countermeasures against serious public health

threats. The White House, for example, has said that the program

is intended to create and procure countermeasures that are modern, new and next generation. Yet as I mentioned in my opening

statement, HHS recently took $120 million in BioShield funds to

purchase 5 million doses of anthrax vaccine that was licensed in

1970. Do you think that was a good idea, or should we be using

it for future innovation?

Mr. SIMONSON. I think it was a very good idea. And it was contemplated in the statute. The statute says, a security countermeasure without a commercial market, other than as a security

countermeasure. That describes the BioPort vaccine. And as we

have, I think agreed, it is an important vaccine to have in the

Stockpile.

Mr. WAXMAN. Thank you. Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you.

Mr. Issa.

Mr. ISSA. Thank you, Mr. Chairman.

I would like to continue right along that same line, but switch

for a moment to the nuclear threat. I heard that, for what little information it has given me, I some 30 years ago was in bomb disposal, went through nuclear-biological-chemical training, just

enough to understand that everything you are mentioning pretty

much was the cold war solution.

So to say that we have something to deal with hundreds of thousands of people that might be affected, even by a rather low technology dirty bomb, is not to say anything terribly new. I saw your

head shaking. So I don’t think we have to go further into that.

After September 11th, and particularly after October when we

began realizing that there would be followon threats, and certainly

after July 7th, we are all aware that al Qaeda has not gone out

of business, and if they can attack greater London, which is far

more fortified than the United States, they will be back here. Why

is it we have nothing that can deal with, even a small amount for

the first responders, and for the hospital personnel who would also

be suffering, why is it we have nothing that is going to dramatiVerDate 11-MAY-2000 12:10 Oct 11, 2005 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 D:\DOCS\23143.TXT HGOVREF1 PsN: HGOVREF1
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cally reduce the effects of low-level—let me rephrase that—of radiation sufficient to give radiation sickness or death today? Iodide

doesn’t get you there.

Mr. SIMONSON. I agree with that. This has been, Congressman,

one of my great frustrations since——

Mr. ISSA. We are here to relieve your frustrations.

Mr. SIMONSON. Good. [Laughter.]

Since beginning work in this area, a lot was done in the civil defense movement, in the 1950’s, the 1960’s, that was disassembled

in the 1970’s and 1980’s. There has not been an enormous amount

of work, basic and applied research, on countermeasures against

radiation. Funding for the Government’s agencies that do that sort

of work, like the Armed Forces Radiobiology Research Institute, are

pretty much level.

We sought to add to that. We infused funds, Dr. Fauci’s institute

did, into AFRRI to begin work there to try and develop more of

these things. But it takes some time. Like you, I don’t think this

is a satisfactory state of affairs. We are moving, I think, cautiously

but with deliberate speed to remediate it.

Mr. ISSA. OK. Just following up one more on that, yesterday we

had a rather lengthy hearing chaired by the chairman here on entrepreneurs and the Government and how to make it more entrepreneurial. We even had the former Speaker of the House sitting

in your seat. One of the all agreed on by everybody on the panel

was that when you put out a request for entrepreneurial behavior,

which to me is risk taking, with the hopes of a return but no guarantee, that the one thing Government has to do is follow through

on that promise, meaning, if you say develop radiation or biological

vaccines, antidotes, treatments that are effective and reach a

standard, we will buy from one of you. Not from all of you. It is

a contest. First man to the moon wins, all the others just get leftover capsules sitting in space.

We have already done that, companies have made these investments. One of the next panels, or the entire next panel, is going

to be all about people who made those. And now we are sitting here

saying—what was it you said, chairman, engaged to be engaged?

We are in this position of engaged to be engaged. When will we

say, we are going to buy at least enough doses of radiation sickness

for the nuclear power plants we expect to be building in the years

to come? At least for things which domestically might happen,

which we are going to need to be ready for, that we have never

been ready for. And then by the way, more doses if we believe that

there is a threat and positioning them where they do good.

When is that engagement to be engaged going to become an engagement date?

Mr. SIMONSON. Once the draft request for proposal is published,

that will lay out a time line which I think will be responsive to

your question. I can’t give it to you right now, because it hasn’t

been published. But once it is, it will be clear in that document.

All I can tell you is, I have certain limitations on me, what I can

say about Federal acquisitions, when we are contemplating one.

But I can leave you with the assurance that no one is more concerned about this than I am. This is something that we focus on

64

every day at our place. I know it does not always seem satisfactory

to the industry.

Mr. ISSA. And at the risk of seeming like Sam Donaldson, a very

quick followup. We live in a 2-year world here in Congress. We can

only provide you money for 2 years, and after that it is a promise

to promise money, and we deal around that.

Can you give us a range outside of your RFP of when effectively,

you expect to have delivery of drugs, if they exist, to deal with each

of these areas, in the case of radiation, in the case of this draft

RFP? Can you just give us a date? Is it greater than this Congress?

Is it beyond the next Congress? Will it be after Senator Hillary

Clinton leaves office? I just need to know a range. I know that is

open to so much questioning.

Mr. SIMONSON. I would say within the life of this Congress, there

will be progress, as there has been progress. That is as far as I can

go on that.

Mr. ISSA. Yes, Doctor.

Dr. FAUCI. Again, as I mentioned, myself and my agency are responsible for the research that goes into that. But the question you

asked, Mr. Issa, of Mr. Simonson really does relate to the success

or failure of the research to prove in a pivotal study that this is

FDA licensable. That is an issue that is sometimes not fully understood. Because there is more than just having the money. Do you

have a product that is going to, in a clinical trial, show to be effective in what you want it to be effective with, so that it would pass

the criteria of something that would be FDA licensable to go into

the Stockpile.

Now, that is not an excuse for any slowness or fastness. But that

is something that really is not understood, that just because there

is a product out there doesn’t necessarily mean it could be bought

to put into the stockpile. There has to be at least the pathway toward what will be FDA approval.

Having said that, if I might just take an extra minute to point

something out in response to the question that the chairman asked

when I showed that last slide, he asked a very relevant question:

is there anything on there for radiation? The reason that there isn’t

is that we are very far advanced, when you think in terms of microbial and toxin threats. The reason for that is that for decades,

we have been preparing for naturally emerging microbes.

So we have the apparatus in place, we have the scientists there,

we have the people interested in it. And we do it every day. Infections emerge every day that might be a worse threat than a deliberately released microbe. That is not the case with some other

areas of defense countermeasures.

And Mr. Simonson mentioned the issue of the gaps that have

been left following the cold war about radiation. We have to almost

start from square one. We have to look at what we have, we have

to get the indication for licensure, and then we have to go and do

the research, research on issues that were never considered when

we had nuclear holocaust threats, because there really wasn’t much

concern about the after-effects of it. It was either you blow up a

city or not. It is a totally different picture now, which is the reason

why the research is taking time.

65

So I hope that at least partially answers your question about predicting a timeframe.

Mr. ISSA. It does partially answer it. Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

Dr. Vitko, one of the jobs of the Department of Homeland Security is to identify a material threat to the American people from

bioterrorism. You have testified that one of the challenges of the

task is that the list of potential threats is quite long. The Department has responded to this challenge by focusing its list on the

specific agents deemed to be the most dangerous and credible

threats; and of course to me, that makes a lot of sense.

Another way to address the multitude of potential threats is to

shore up the basic public health infrastructure and respond to all

threats. Core public health functions include communication, surveillance and emergency response. The problem is that the basic

public health system is not fully functional. For example, only a

handful of States have the capacity to deliver and distribute products from the Strategic National Stockpile. There are also major

gaps in laboratory capacity and personnel.

My question is, do you agree that a strong public health system

is critical to responding to many of the different agents of bioterrorism?

Dr. VITKO. Absolutely. A strong public health system is the key

to any biodefense that we have.

Mr. DAVIS OF ILLINOIS. What would you say that the Department

of Homeland Security has done, or what is the Department doing

to explain the need for public health investment to the public and

of course to the administration?

Dr. VITKO. The Department of Homeland Security’s responsibility

here, as you know, is an overall coordination and response to terrorist events with the National Response Plan.

Mr. DAVIS OF ILLINOIS. I am sorry, I am having a little difficulty

hearing.

Dr. VITKO. I am sorry, Mr. Davis. I was saying that the Department has responsibilities at multiple levels. One is to coordinate

the overall response through the National Response Plan. In there,

there are specific annexes that deal with, in fact, biological response, in which HHS has a lead under ESF 8 in those activities,

emergency support function 8.

We also work very closely with HHS and with the other members

of an interagency team in a policy coordinating committee on the

Homeland Security Council on Biodefense, in which we look at the

integrated aspects of a defense and address key issues, such as

mass casualty response, the need and ways to improve that. And

we are part of a team of working with them to help identify the

key areas to emphasize and develop.

Mr. DAVIS OF ILLINOIS. Does the Department have a position on $130 million in proposed cuts to State and local health departments for bioterrorism preparedness?

Dr. VITKO. I don’t know if the Department has an official position. I have not been asked that. I believe we would say that we

support HHS fully on what they are doing.

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Mr. DAVIS OF ILLINOIS. Does the Department then have an advocacy responsibility to point out that which it understands to be

need?

Dr. VITKO. Yes, the Department does have such an advocacy responsibility. And one of the ways that we exercise that is through

large scale exercises, barring actual events. As you know, we have

just conducted Top Off III as an exercise. In there, the influence

of mass casualty response clearly comes up. We work then through

the various interagency committees to identify what those needs

are, to look for innovative ways to address those and to tackle

those and lay out a road map for getting there.

Mr. DAVIS OF ILLINOIS. Would you have any way, would you venture to suggest any assessment of how the American public is responding to threats of bioterrorism?

Dr. VITKO. I have no formal insight in that, in the sense of being

able to gauge the full American public. Clearly, it is a concern that

is held by many. At the same time, barring an actual event, one

tries to balance that in executing their daily lives. It is something

they are counting on us as a country to have something there for

them, if something bad should happen. But I do not think they are

dwelling on it on a daily basis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman. I

have no further questions.

Chairman TOM DAVIS. Thank you very much.

Mr. Shays.

Mr. SHAYS. Thank you, Mr. Chairman, for holding this hearing

on a very important subject.

I am going to make a statement to which I then want to respond

to questions, Mr. Secretary, that goes to you, basically. During the

House debate on the BioShield bill, I expressed concern over the

provision that allowed for the use of unapproved vaccines and

treatments by military personnel. Testimony before the National

Security Subcommittee by the Gulf war veterans confirmed the Department of Defense [DOD], had consistently failed to meet basic

requirements to inform recipients about investigational drugs or

keep adequate medical records.

Now, the mandatory DOD anthrax program only built on that

sorry record, relying on a dated vaccine formulation tested and approved only for protection against cutaneous exposure, not against

weaponized or aerosolized anthrax. A Federal court has enjoined

the use of the vaccine in a mandatory program due to flaws in the

Food and Drug Administration approval process.

And this is my key point, rather than rely on the BioShield to

develop a modern anthrax vaccine, the Pentagon chose to rely on

another provision of the law permitting the Department of Health

and Human Services to grant ‘‘emergency use authorization’’ for

continued use of the now ‘‘unapproved’’ anthrax vaccine, albeit in

a voluntary program.

So these are my questions. First, did the Department of Health

and Human Services have access to the classified November 2004

intelligence community assessment of the anthrax threat?

Mr. SIMONSON. Yes.

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Mr. SHAYS. Second, did HHS agree with the Pentagon’s conclusion about the nature of the threat our troops faced from anthrax

attacks?

Mr. SIMONSON. We did not undertake our own review of their

conclusions.

Mr. SHAYS. Did you agree with them?

Mr. SIMONSON. We accepted the Department of Defense’s conclusions.

Mr. SHAYS. So you agreed with them?

Mr. SIMONSON. We accepted them.

Mr. SHAYS. Has the authorization for anthrax and the congressional concern changed any HHS policies regarding future requests

for emergency use authorization?

Mr. SIMONSON. No.

Mr. SHAYS. So there is no change in policy at all?

Mr. SIMONSON. No, other than that, as I mentioned in the

past——

Mr. SHAYS. Why was it necessary? Why did they need to come

to you if they had simply made it voluntary? Why did they need

to come to you for an emergency program, since you have the authority to do it? They have the authority—do they not have the authority if it is for a voluntary program?

Mr. SIMONSON. It is not clear to me how they would do it as a

voluntary program but as an EUA. I suppose they could do it as

a treatment IND, but the mechanism for doing that is extremely

cumbersome. We wanted to make very sure that the program that

we were authorizing allowed members of the Armed Services to decline to take the vaccine. It has been very clear, and as far as I

can tell, that part of the program has been very effective.

Mr. SHAYS. Right.

Mr. SIMONSON. Our concern was to make the vaccine available

to members who voluntarily wanted to take it. The Department of

Defense represented to us that while in the field, it was very common for senior officials, including Dr. Winkenwerter, to hear, when

are you going to make this vaccine available to us?

And as I think I mentioned to you before, our view was, Secretary Thompson’s view and my view was, if we were in that battlefield, we would want the option to take this vaccine. So we accepted the Department of Defense’s determination, but we issued

the EUA in a way that was consistent, we think, with the spirit

of the request.

Mr. SHAYS. And what kind of requirements, and I would agree

that the voluntary nature of it is its saving grace. I do agree that

if people want to use it, they should have that capability.

But tell me, what demands and oversight do you have over the

Department’s explanation to its servicemen and women about the

voluntary nature of it?

Mr. SIMONSON. There is an agreed-upon document that states all

of the conditions, in very clear language, to the servicemen, to the

potential vaccinee. That was approved by the Food and Drug Administration before it could be used by DOD.

Mr. SHAYS. Thank you very much. Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you.

Mrs. Maloney.

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Mrs. MALONEY. Thank you for having this hearing. I would like

to ask Stewart Simonson or Dr. Fauci, the general question on the

BioShield progress, the material threat assessment was done in

four areas, yet only two RFPs have been issued on the material

threat assessments, and why have the other two RFPs not been

issued.

But I would like to go back to the questioning also that Ranking

Member Waxman had on the BioShield anthrax vaccine purchase

program. This is an issue that is very important to me. We have

suffered anthrax attacks in the district that I represent in New

York. Apparently, you signed an $877 million contract with one

company, VaxGen, to procure the 75 million doses of anthrax vaccine, but you do not expect to get that until 2006.

I understand it is a company that has never done this type of research before, and what is this vaccine that is so much better than

the stop-gap purchase of 5 million doses of an older, less effective

vaccine for $125 million from a second company, I believe it was

BioPort? Mr. Waxman mentioned that possibly we should not have

used BioShield funding for the stop-gap purchase.

But I find it, I would like to know, why are we going to a company that has never done anthrax or have a track record in producing it? And then you go to another company that can do it at a lesser degree or whatever. Could you explain that contract to me? Why

are we going to a company, why did we need the stop-gap, why

couldn’t the first company—you understand what I’m saying.

Mr. SIMONSON. Yes, sure.

First, VaxGen has done work with this particular type of product. They have an R&D contract with Dr. Fauci’s institute, so they

are not novices in the field of recombinant protective antigens. The

idea is to develop a next generation vaccine. We have been advised

by a number of scientific entities, including the Institute of Medicine, that there is a need for a new anthrax vaccine, using 21st

century technologies.

So this is what we are doing. We are trying——

Mrs. MALONEY. And VaxGen has produced other anthrax vaccines?

Mr. SIMONSON. No, they have work underway to produce anthrax

vaccine. They have a research and development contract with Dr.

Fauci’s institute.

It is a small biotech firm. But I think you will see, ma’am, that

this is going to be the story of Project BioShield. We will be working with the smaller biotech——

Mrs. MALONEY. What other vaccines have they developed in the

past?

Mr. SIMONSON. There is no vaccine that they have developed for

anthrax that has been licensed. This is a small——

Mrs. MALONEY. Have they developed any vaccines?

Mr. SIMONSON. Not that have been licensed, no.

Mrs. MALONEY. No.

Mr. SIMONSON. But I have to tell you, this will be a fairly commonplace thing with BioShield. The large pharmaceutical and

biotech firms are not interested in this work. Dr. Fauci can tell you

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ently with these smaller firms, and it is going to require an enormous amount of Government effort to get this product licensed.

But there will be good that comes from that. We will build infrastructure and expertise——

Mrs. MALONEY. So no other company wanted to bid on it?

Mr. SIMONSON. There were other bids, yes.

Mrs. MALONEY. And did they have a track record in

producing——

Mr. SIMONSON. They were similar types of companies.

Mrs. MALONEY. They had never produced anthrax before, the

other companies that bid on it, anthrax vaccine?

Mr. SIMONSON. I am restricted a little in what I can say under

the procurement rules, but they were similar types of companies.

These were not big pharma companies.

Mrs. MALONEY. I would just be interested in why this company,

you believe, can come up with it when they have no track record.

Mr. SIMONSON. This was subject to a very extensive technical review within the Department of Health and Human Services, experts both within and without Government. We work with what we

have. We send out RFPs, we get proposals back and we review

them and do the best we can with it.

Mrs. MALONEY. OK. I would like to see the proposals and look

at them.

Mr. SIMONSON. OK.

Mrs. MALONEY. Also, there was a report that came out about 2

weeks ago from some research group in San Francisco. They were

talking about the RFP for botulinum antitoxin, which apparently

is very deadly, it could go into the milk supply and hurt many people. What are we doing on that? This report, I don’t know if it is

correct or not, said we had not done an RFP or reacted to this particular threat.

Mr. SIMONSON. We have a number of botulinum antitoxin programs underway. I assume you are referring to the article that

came out of Stanford.

Mrs. MALONEY. Yes, that is the one.

Mr. SIMONSON. We have a program that has just been completed

which took plasma that was created during the early 1990’s and

finished that into botulinum antitoxin, and we have a second botulinum antitoxin program that is underway right now. An RFP, in

fact, I think goes out later today or tomorrow.

Mrs. MALONEY. Oh, really, today?

Mr. SIMONSON. Yes, later today or tomorrow.

Mrs. MALONEY. Then my first question on the material threat assessment, I am glad you have done them. But I read that only two

RFPs have gone out, when we need to have four going out. I just

would like your response to that.

Mr. SIMONSON. Well, I am not sure that is accurate. As I said,

I think the botulinum one went out or will be going out in the next

couple of days.

There is a period of time that occurs between when the material

threat assessment is given and when the RFP is done. The RFPs

are very complicated instruments. It is the nature of the document.

Mrs. MALONEY. But actually two have gone out, one is going out

today and there is a fourth that needs to go out, right?

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Mr. SIMONSON. Right.

Mrs. MALONEY. My time is up. Thank you.

Chairman TOM DAVIS. Thank you very much. Ms. Watson.

Ms. WATSON. I too want to add my thanks, Mr. Chairman, to you

for having this hearing.

We have been talking about the chemical and radiological and biological threats and protecting the general public against an attack. We have experienced the anthrax attack when it reared its

ugly head in the Hart Building and in the Longworth Building.

So I want to focus on the responsibility that we have to the general public. I think legislators must be held accountable for the organizational structure that we create and the procurement processes that we devise. As we move forward with our BioShield programs, it is imperative that we as lawmakers take all bias and politics out of the funding and jurisdiction. We must also be cautious

and informed on the proper levels of preparedness.

In terms of public health, too little is far greater a risk than too

much. The difficult job that Congress approaches is making decisions based on well-constructed calculations, not on the emotional

or political agendas that can arise when a threat or an implied

threat is aimed at our country.

So I too would want to know about this company that we are

going after and I have learned from Roche, the pharmaceutical

company, that 7 million courses of treatment, and I guess this

treatment has to do with Tamiflu, we had a hearing last week on

it, are available for sale from next year’s production. I see the flu

as being a threat to the public’s health.

So I really feel, Mr. Chairman, that oversight needs to be periodical and continuous. We need to know and you can comment, let me

be sure I am addressing this to the right person, I guess it is the

Honorable Stewart Simonson, you can comment as to the level of

preparedness that we are positioned at at this particular time.

I want to be sure that as you analyze, as you review these various proposals that you are getting, I just heard it said that not a

whole lot of companies responded, so we are going with the one

that has. I want to make sure that what they are presenting us

with is the best and that it will guarantee that we can have a BioShield stand in the way of attacks that would be made on our general public.

So with that said, I am listening very closely to hear evidence

that we are prepared, or we are getting there. Thank you very

much, and thank you very much, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

Any other questions? Mr. Van Hollen.

Mr. VAN HOLLEN. Mr. Chairman, I just want to first apologize

to the witnesses for being late. I am on two other committees that

have markups this morning, Judiciary and Education and Workforce. I look forward to reading your testimony and listening to the

next panel as much as I can.

Thank you, Mr. Chairman, for the hearing.

Chairman TOM DAVIS. Thank you.

Ms. Norton, any questions?

Ms. NORTON. None, thank you, Mr. Chairman.

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Chairman TOM DAVIS. OK, thank you all for bearing with us. We

will dismiss this panel at this point, take a 2-minute recess as we

convene the next panel. That panel will have Mr. Robert Kramer,

the CEO of BioPort Corp.; Mr. Richard Hollis, the CEO of HollisEden Pharmaceuticals; and Mr. Gerald Epstein, the senior fellow

for science and security, Homeland Security Program, Center for

Strategic and International Studies.

[Recess.]

Chairman TOM DAVIS. We are going to our second panel. Again,

we have Mr. Robert Kramer, the CEO of BioPort Corp.; Richard

Hollis, the CEO of Hollis-Eden Pharmaceuticals; and Dr. Gerald

Epstein, the senior fellow for science and security, Homeland Security Programs, Center for Strategic and International Studies.

I know Mr. Issa wanted to be here to introduce you, Mr. Hollis,

but I am going to go ahead and swear you in. I am going to have

to run upstairs for a couple of minutes in between and will have

one of the other Members take the chair. Please rise and raise your

right hands.

[Witnesses sworn.]

Chairman TOM DAVIS. Thank you very much.

Dr. Kramer, we will start with you and then we will go to Mr.

Hollis and then to Dr. Epstein. Thanks for being with us and

thanks for your patience.

STATEMENTS OF ROBERT G. KRAMER, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, BIOPORT CORP.; RICHARD B. HOLLIS,

CHAIRMAN AND CHIEF EXECUTIVE OFFICER, HOLLIS-EDEN

PHARMACEUTICALS; AND GERALD L. EPSTEIN, SENIOR FELLOW FOR SCIENCE AND SECURITY, HOMELAND SECURITY

PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL

STUDIES

STATEMENT OF ROBERT G. KRAMER

Mr. KRAMER. Chairman Davis, thank you, as well as the other

members of the committee, for the opportunity to share some comments with you this afternoon. You have a copy of my written testimony and I am not going to read it, but rather just make a few

general comments and summary observations.

These comments are going to be focused on the recent decisions

by the Government related to the procurement of vaccines to protect Americans from the threat of anthrax and botulinum. But I believe they have application to all other threats that are being considered. BioPort Corp. manufactures BioThrax, the only FDA-licensed product for the prevention of anthrax. Our company has a

more than 70 year history of development, testing, licensure and

commercialization of biologic products.

Since privatizing the company in 1998, we have upheld our longterm commitment to the Federal Government to be a reliable partner for anthrax vaccine as a critically needed biodefense countermeasure. Since 1998, BioThrax has been used to protect over 1.3

million military members serving our country throughout the

world. To be clear, this means over 5 million doses of BioThrax

have been administered to these military personnel.

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The product itself has been licensed since 1970. It has been the

subject of numerous safety and efficacy studies, as has been well

documented, one of the most thoroughly reviewed vaccines. The

most recent review was done by the National Academy of Sciences

Institute of Medicine panel, which published this finding in March

2002, which sought to answer two questions: is the vaccine safe

and is it effective? Very clearly, the answer to both those questions

was yes.

As a company, we have submitted more than four proposals since

2001, detailing our commitment, our capability and willingness to

provide an unlimited number of licensed anthrax vaccine doses to

the Strategic National Stockpile. Rather than take us up on any of

those proposals, the Department of Health and Human Services

has recently awarded a nearly $1 billion contract for an experimental vaccine that has been used in fewer than 1,000 recipients.

I will repeat: our vaccine has been used in over 1.3 million patients. The experimental product they have invested over $1 billion

in has been used in less than 1,000.

This policy decision by HHS raises serious concerns about the

Government’s commitment to the underlying goals of Project BioShield. Let me be real specific in that regard. One of the important

goals of BioShield is to increase the number of biodefense companies in the United States. By prohibiting proven companies with

proven products from participating in contracts like the 75 million

dose contract for anthrax vaccine, the Government will eliminate

biodefense companies, not increase them, and will not encourage

them to participate in taking the risks that we have all talked

about this morning and this afternoon necessary to bring products

to the market.

A related goal of BioShield was to create a strong manufacturing

base to further avoid a similar crisis to what occurred in October

2004 with regard to the flu vaccine supply. The Government excluded from the outset and by design the only licensed anthrax vaccine from participating or competing for the 75 million dose order.

Unfortunately, this experience is not only occurring with respect

to anthrax vaccine, but also for vaccines to protect against botulinum. The U.S. Government, in announcing its intention to purchase an early stage experimental botulinum vaccine from a sole

source eliminated several competing manufacturers and technologies and reduced the potential for ultimately acquiring a safe

and effective vaccine targeted at this threat.

A third Project BioShield goal was to increase the uses for licensed products. Yet with respect to anthrax vaccine, the purchase

of an experimental product does nothing to accomplish this.

The last goal that I will mention has to do with the Government’s commitment to buy best in class medical countermeasures

at competitive prices. Again, HHS intends to procure a vaccine for

nearly all of the future stockpile needs for anthrax from a single

supplier at a cost higher than it was proposed for the existing

FDA-licensed anthrax vaccine.

Further, phase 1 studies provide no evidence that the experimental product provides any improvement in terms of safety or efficacy over the currently licensed product, BioThrax. In fact, the

published data illustrate that it took an additional dose plus an adVerDate 11-MAY-2000 12:10 Oct 11, 2005 Jkt 000000 PO 00000 Frm 00076 Fmt 6633 Sfmt 6633 D:\DOCS\23143.TXT HGOVREF1 PsN: HGOVREF1
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ditional 30 days for the experimental product to provide a comparable protection to that with BioThrax.

Despite these results, HHS distributed a news release in March

2004 touting the experimental vaccine as being proven to be safer

and more effective than BioThrax. HHS subsequently withdrew

this news release from its Web site when they were under inquiry

from Senator Grassley.

I will add that had a company such as ours or anyone on this

panel made such remarks, you can be assured that the FDA would

have demanded an immediate retraction and withdrawal and correction of such statements.

HHS has staked the Nation’s protection against the No. 1 biologic threat on an experimental product. It is clear to me and many

of my colleagues in this industry the shortcomings that I have discussed and articulated. One way to help prevent these shortcomings from reoccurring is to provide some early oversight into

the BioShield procurement process. The evaluation and eventual

procurement of products such as anthrax vaccine is extremely complex and requires expertise from an open, independent, multi-disciplinary review. The risks of failure for products such as these are

too great and the costs of these failures are simply too large to continue to do otherwise.

When you add to that the importance of these products, namely,

they protect and save lives, in my opinion there is no Government

procurement challenge greater than what is at stake today with

Project BioShield. It therefore requires a sound, discipline approach

that includes expert representation from medical, scientific, regulatory and compliance personnel to assist with these key decisions.

In closing, it is essential to recognize that our industry is very

young, very fragile and very much dependent upon a unique customer, the U.S. Government, for a strong partnership to bring

these kinds of products to market. Unless we do so, the industry

will be characterized by companies that have a lack of proven

record, they will be in it for the short run and they will not be a

viable long-term partner for the U.S. Government.

Thank you again for allowing me to share with you my comments

and I look forward to answering any questions you have.

[The prepared statement of Mr. Kramer follows:]

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Mr. SHAYS [presiding]. Thank you, Mr. Kramer.

Mr. Hollis.

STATEMENT OF RICHARD B. HOLLIS

Mr. HOLLIS. Mr. Vice Chairman, members of the committee, my

name is Richard Hollis. I am chairman and CEO of Hollis-Eden

Pharmaceuticals, the manufacturer of NEUMUNE, the first medical countermeasure being developed to address acute radiation syndrome or radiation sickness as a result of nuclear terrorism and exposure to radiation. I ask that my entire statement be entered into

the record.

This morning, the chairman opened up the meeting with some

chilling videos about the nuclear threat and also in yesterday’s

press release from Michael Chertoff describing the reorganization

of the Department of Homeland Security, he stated: ‘‘Of all the catastrophic threats we face, a nuclear attack on our soil would be

uniquely threatening to our society.’’ All of the Nation’s leaders

from the President on down have concluded that the greatest

threat to our Nation is nuclear proliferation and nuclear material

in the hands of a terrorist.

Recently, during a televised interview, the chairman and vice

chairman of the 9/11 Commission both stated that not only is nuclear detonation in one or more of our major cities possible, but it

is probable. The death toll from the detonation of a relatively small

nuclear device in one or more of our major cities would be devastating.

Medical reports indicate the vast majority of those who are

killed, hundreds of thousands would die from acute radiation syndrome. The sad thing about this is the overwhelming majority of

these people could be saved if our Government was better prepared

to respond to a nuclear scenario.

Now, imagine if you could rapidly distribute a drug to people to

give themselves an injection, much like the soldiers do following a

chemical attack, and most importantly, imagine up to 90 percent

of the people who receive this treatment could survive exposure to

radiation. We have a drug in development with the potential to

treat acute radiation syndrome that could be in the Strategic National Stockpile as early as next year.

In primate tests done under the Department of Defense oversight

using lethal doses of radiation, NEUMUNE has been shown to increase survival rates up to 90 percent. To date, it has no significant

side effects. It is inexpensive to manufacture. It can be self-administered in the field without hospitalization. We have opened up an

IND with the FDA to initiate our human clinical studies, and we

anticipate NEUMUNE could potentially be commercialized with an

NDA toward the end of 2006.

There is currently no drug in the stockpile to deal with the acute

effects of a nuclear detonation or acute radiation syndrome. Despite

this phenomenal progress with NEUMUNE, and the suitability for

BioShield contract, we have heard very little from the Federal Government in regard to the procurement of this drug. Without having

this commitment, we do not know how to scale our batch sizes,

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lions of dollars and we have reached the point where decision have

to be made or the project risks meaningful delays.

Over 10 months ago, HHS issued a request for information for

therapeutics to treat acute radiation syndrome. We were informed

that a draft RFP would be issued by July 2005, and to date, we

have still heard nothing. More to the point, we don’t even understand why the agency is even going through a draft RFP, given the

results of the prior RFP process that has already taken over 10

months. During this 10 months, we have incurred tens of millions

of dollars in development. It is just more delays and mixed market

signals to our investors.

To the best of our knowledge, we are the only company that is

close to delivering a drug that meets the requirements for this specific request for proposal. For this reason, earlier this week, HollisEden submitted an unsolicited proposal to allow HHS to immediately procure NEUMUNE for the Strategic National Stockpile.

This proposal meets each and every legal requirement for the acceptance under existing law and regulation.

In an environment where BioShield was supposed to stimulate

capital investment in companies like ours, delays by HHS have

caused Hollis-Eden to lose approximately $600 million in market

capitalization. This is just the opposite effect of the intention of

what BioShield was supposed to do.

In summary, BioShield, to work effectively, HHS and DHS must

define the markets by issuing the threats and what countermeasures are needed to address those threats and how many doses

of the drug will be procured. They need to put out RFIs and RFPs

for what countermeasures are needed and they need to have an

independent scientific review board assess the respondents to the

RFIs as to whether the science is feasible and whether the company can deliver in a reasonable period of time and award advance

purchase contracts early.

So I would submit to this committee, this is a very important

question for me to ask the committee and members, given that the

nuclear threat is the greatest threat we face, given that more than

a million lives per detonation may be on the line, given that a

promising, effective medical countermeasure to acute radiation syndrome is close to fruition and it is now 4 years after September

11th, why is this drug not a top priority to be deployed to protect

the American public?

Finally, how will you, our country’s leaders, try to explain why

so many people unnecessarily, from a nuclear September 11th,

when experts are predicting this nightmarish scenario, and we fail

to prepare our Nation by providing and forward deploying a drug

that could save millions of lives?

Mr. Chairman and Mr. Vice Chairman, it is an honor to be here

today. Thank you for the opportunity to be of service to our Nation

and homeland security and to protect and safeguard the citizens of

our free country. Thank you very much.

[The prepared statement of Mr. Hollis follows:]

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Mr. SHAYS. Thank you, Mr. Hollis. It is an honor to have you

here.

Dr. Epstein.

STATEMENT OF GERALD L. EPSTEIN

Dr. EPSTEIN. Thank you, Mr. Vice Chairman and members of the

committee.

I do not have a company. I would like to step back a little bit

here and discuss some overall aspects of the bioterrorism threat,

what those characteristics imply for our ability to counter that

threat. I would like to point out that although essential, the programs we have in place are going to be insufficient as time passes

on in the long run to deal with threat, particularly emerging

threats. And finally, offer some cautions for you to consider.

The bioterrorism threat is real, but it is uncertain in detail. It

is getting increasingly more uncertain. Fortunately, we have no

historical record to draw from. Moreover, there is no reason to

think the future will look anything like the past. We do not know

exactly what we are going to be facing.

For one, the technologies involved are what I call pervasively

dual use. Essentially every skill, material, piece of equipment or

agent one would need to develop a weapon is available and in use

somewhere in the economy for a legitimate purpose; not all in one

place, but available somewhere. Very little is uniquely malicious.

Second, the technology is expanding both in market penetration

and disseminating around the world in ways which will make these

capabilities increasingly more accessible to greater numbers of people. Rather than asking the question, will a terrorist really turn to

biology and learn something they are not familiar with, we have to

recognize that in the world we are headed into there will be more

and more people who already know the biology. There the question

is, will these people become sympathetic with or turn to terrorism?

Learning the technology will not be the problem for them.

Finally, science is continually advancing, realizing more things

that we need for beneficial purposes, but opening the possibility of

additional ways to attack.

What this means for our ability to counter these threats is that

intelligence is going to be able to provide less and less guidance for

us to base our planning on. As I mentioned, the dual use nature

of the technologies involved means it is going to be very hard to

look at something taking place and determine whether or not there

is malicious intent behind that.

The expansion into the marketplace and around the world of the

relevant capabilities means not only are we looking for a very ambiguous and maybe unknown signal for a weapons program, but we

are trying to pull that signal out of a very rapidly growing base of

fully legitimate activity. Small signal, large increasing background

will make it very hard to use intelligence mechanisms to find out

what the problem is.

And as science continues to advance, we may be faced with

threats we do not even know today, because we are learning more

about how to keep people healthy and unfortunately, how to possibly make them ill.

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But the problem is even worse than that. Even if we knew precisely everything about everyone on the planet today that was pursuing malicious applications of biology, the time scales of our defensive preparations versus the time scale of what an attacker would

need to go through are quite mismatched. Offense is much more

flexible and much more rapid than a defender.

The countermeasures that we need to develop in BioShield and

whatever other mechanisms and research approaches we have in

place do not need to be focused against the threat today, even if

we had a perfect picture of that, but at the threat years down the

road when our countermeasures will be deployed. Given the difference in time scales between what it takes to develop a weapon

versus what it takes to develop a countermeasure, the threat 5 or

10 years from now may not exist until 4 or 9 years from now. The

groups may not be formed, the technologies may not be around.

So in principle, even perfect intelligence about the world today

will not be good enough to help guide where we need to go with

our defensive efforts.

The BioShield program and the R&D programs at NIH and elsewhere in the Government are essential for countering this threat.

But we are going to need a new approach as we look ahead, not

a different approach, but additional approaches, as we proceed. For

one, we can’t just write a list of threat agents and start checking

the boxes and going down a list. The vaccine, the countermeasure

development programs, are quite expensive. Even $5.5 billion runs

out pretty quickly when you spend a half billion a pop.

So some agents are certainly worthwhile focusing on, anthrax

and smallpox are so serious and qualitatively enough above other

possible threats that it is worth spending a lot of money to deal

with those problems. But you can’t go very much farther down the

list of agents before you recognize that there is not enough money

and there are always going to be things you are not going to get

to. It is not clear that the ones you have not paid for are less dangerous than the ones you have.

What we need in the future is a broad, flexible and adaptive response capability. This is going to require some new science. We

don’t really know how to do that now. But it is also going to require some new organizational approaches.

Traditional vaccines, I think, although they are important for the

threats we know today, are going to have less and less utility as

time goes on. They are too specific. It is too long for them to take

effect once they have been administered. And the development

process takes too long. We need things like broad spectrum therapeutics and antivirals that can handle several different threat

agents that don’t have to be designed for a single one.

And then we need a whole set of research tools. We need to improve the productivity and speed of our research and countermeasure development enterprise, assays, screens, computational

tools, animal models, ability to predict both, damage mechanism an

agent can do, and the ability to predict what a countermeasure

may be able to help you with. As we proceed in an era where specific threats will be less and less identifiable, we need that kind of

broad capability.

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And finally, the caution I would like to hold is, there is certainly

and understandably a great reluctance to take Government money

and spend it in ways which realizes a private benefit. So there is

some interest in saying these are biodefense missions which we

need to pursue versus these are commercial interests which we will

let the market take place and we don’t want to apply Government

funds.

As we proceed in the future, it will be harder and harder to tell

the difference between a biodefense threat, a biological threat, an

emerging infectious disease or another type of natural occurrence.

If we design our countermeasures to only handle what we consider

to be biodefense but do not address these other areas, we will not

be doing the right things.

So rather than avoiding the possibility that we may be actually

helping a commercial firm, we actually have to embrace that, I

think. I would be glad to answer questions.

[The prepared statement of Dr. Epstein follows:]

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Mr. SHAYS. Thank you very much. Thank you, all three of you,

for your testimony.

Let me just say that we start with Mr. Issa. We have Danny

Davis, Ms. Watson, Mr. Van Hollen and Ms. Norton and then I will

ask questions. We will go in that order, unless the chairman comes,

and then obviously he will jump in.

Mr. ISSA. It is good to be king, or chairman.

Thank you, Mr. Chairman.

Dr. Epstein, you really made the case for me in your testimony.

I was thrilled to hear it. All the problems, all the challenges, all

the hurdles and all that we could spend today and it won’t fix what

is attacking us tomorrow is all true. Conversely, though, once we

take the bio out of BioShield, what is left is radiological. I would

like you to comment, if you feel I am missing the point here.

But Mr. Hollis, as I see it, if someone goes to an abandoned Russian lighthouse using cesium, that is going to be the same antidote

as if they get yellowcake, as if they do a conventional nuclear

bomb, as if they do any other kind of dirty bomb. Is that correct?

Mr. HOLLIS. That is correct.

Mr. ISSA. And if another Chernobyl or Three Mile Island were to

occur, perhaps because of a terrorist attack, that would be the

same antidote, wouldn’t it?

Mr. HOLLIS. That is correct. Those isotopes all have major impact

on the bone marrow’s ability to produce cells that are necessary for

health.

Mr. ISSA. And the U.S.S. Ronald Reagan, home ported in San

Diego, where I know your company is located, and where I fly back

and forth every week, were to have a reactor breach, that would

be the same antidote?

Mr. HOLLIS. That is correct. I think what you are getting to is,

this is one area we don’t have to worry about a different strain or

pathogen. We can address this area because of radiation.

Mr. ISSA. So this need has been around and known for non-terrorist activities, but certainly heightened because of terrorist activities since the dawn of the nuclear age?

Mr. HOLLIS. Ever since we split the atom and it was weaponized,

yes, sir.

Mr. ISSA. Back to you again, because this really is pivotal to try

to look at how much we can do with bio and for how much versus

the terrorist and non-terrorist threat that something could happen

with radiation. And I might add, somebody mishandling radioactive

materials for cancer treatment would be the same, wouldn’t it?

Mr. HOLLIS. That is correct.

Mr. ISSA. How far away are you from having a treatment in

which somebody will die if they don’t get a treatment, how far are

you away from having a treatment that could be shown to be effective?

Mr. HOLLIS. We got clearance through the FDA and we are

scheduled to perform our pivotal efficacy trial the second half of

this year. We are in the current process right now of setting that

trial up. Concomitantly, we are also setting up our human safety

trial, so we could actually have an NDA through the FDA by 2006.

Mr. ISSA. And the standard that the FDA normally uses, as I understand it from my time at Energy and Commerce, is two-fold.

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One, you have to have minimal adverse side effects and two, you

have to work, you have to be better than nothing at all. Is that also

applied to your potential treatment through the FDA?

Mr. HOLLIS. With weapons of mass destruction in June of last

year, the FDA passed the animal efficacy rule, where it is unethical

to expose human beings to, for instance in this case, lethal doses

of radiation. You can get approved using the animal efficacy rule

in relevant animal species, in this case, non-human primates. You

have to establish safety in human beings. That is the regulatory

process that we are going through.

We have been developing this product exclusively for the past 3

years and the Armed Forces Research Radiobiology Institute started researching this product back in 1997. So this product has been

in the process of being developed for the past several years. We believe if we stay on course, because of the major investment our corporation put into it, that we can have a licensable product by the

end of next year.

Mr. ISSA. So the end of 2006?

Mr. HOLLIS. Yes, sir.

Mr. ISSA. And yesterday we had former speaker Newt Gingrich

and others in to talk about entrepreneurship and people, the Government having a process in which it did not take the risk but

rather transferred the risk to the private sector, to entrepreneurs

who would take that risk in return for a return.

As I understand, there have been no Government dollars to do

this development. This has been on the back of your public company stockholders, is that right?

Mr. HOLLIS. That is absolutely correct. Maybe this is an opportunity I can say that, what I have been hearing today with the first

panel is not what I am experiencing in reality. I am starting to

wonder, sir, if they have read the same BioShield legislation that

Members of this Congress passed. Because it is not being implemented the way it has been written. Companies like ours were supposed to get advanced purchase contracts and paid on delivery.

Mr. ISSA. I ask unanimous consent for 2 more minutes.

Mr. HOLLIS. So it is not being implemented, nor are entrepreneurs being rewarded for the risks they are taking. We are a

role model for BioShield. We are executing it according to the way

it was written, and that is, private investment capital pursuing

these markets that were supposed to be guaranteed markets. And

after 3 years of development, we don’t even know what our market

is yet.

Mr. SHAYS. I am going to allow the gentleman to go 2 more minutes and allow 7 minutes for everybody.

Mr. ISSA. Thank you, Mr. Chairman.

You are a public company, is that right?

Mr. HOLLIS. That is correct.

Mr. ISSA. So the money, I appreciate it is private sector, but the

money that you have used, how much has it been approximately,

just roughly?

Mr. HOLLIS. Approximately in this technology, in the product, about $150 million.

Mr. ISSA. And that came from public stock?

Mr. HOLLIS. All investors, yes.

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Mr. ISSA. So would it be fair to say that your fiduciary obligation

to the market, and for that matter, Bill Arak and others who sue

people when they foolishly abuse the public stock market, depends

on a good faith belief that if you make this product, the Government has committed to purchase it, if it works, if it is the most effective, there was a commitment for that in BioShield.

Mr. HOLLIS. That is absolutely correct, and we are developing the

drug according to the way the legislation was drafted and passed.

It is just not being implemented that way. So if there are shareholders that end up getting concerned about it, I think these things

will start to come into question.

Mr. ISSA. My time has nearly expired. I am sure that there will

be followup along this line.

Dr. Epstein, I appreciate your being used, in a sense, to prove

the point. But I would also reiterate that with the complexity, with

the number of needs that are going to happen on the bio side, I

think it is important that we take this one item and say, are we,

and this is what government reform is all about, are we meeting

our commitment so that hundreds of potential products, people are

going to spend billions of dollars developing them, when we are the

most likely customer, based on a good faith that if we need them,

and if we say we want them, that we will then make a good faith

purchase if they are developed and if you are the winner of that

process, recognizing not everyone will win.

And with that, I yield back, Mr. Chairman.

Mr. SHAYS. Thank you very much. Thank you, Mr. Davis, for

your patience. You have the floor for 7 minutes.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

Mr. Hollis, I guess I could probably glean from your testimony

that there have been some rather frustrating and costly delays,

that it is costing perhaps not only your company but others frustration, but also uncertainty, relative to the development of product

that could be moved to the point of procurement that we greatly

need. Would that be an accurate assessment of the description of

what I have heard?

Mr. HOLLIS. Yes, sir, that is absolutely correct.

Mr. DAVIS OF ILLINOIS. If that is the case, and given that as the

case, is there a way that these developments can be structured so

that of course, any time one ventures into something that is new

and perhaps different, there is a certain amount of risk. And there

is a certain amount of risk taken. I guess there is also a certain

amount of risk sharing.

Is there a way to make sure or to try and make sure that the

risk is such that the American public, that is the Government, and

those who are willing to, on the other hand, invest their resources,

can have the assurances that both are being protected and that is

a win-win situation or a model that is going to produce a win-win

situation for both parties?

Mr. HOLLIS. Yes, sir, there absolutely is. No. 1, industry would

ask that the Project BioShield legislation be implemented as it was

drafted and passed by Congress. I truly believe that the individuals

who are implementing it have made up the rules as we go along.

Because if you read the legislation, it is about stimulating capital

formation and biotech and pharmaceutical companies to produce

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this Nation’s next generation medical countermeasures to mitigate

the medical consequences of weapons of mass destruction.

And to unleash the ingenuity of the entire pharmaceutical industry, it means it has to put the market incentives in place, and it

needs to execute the legislation as it was written.

What is happening here is most of the medical countermeasures

that are being produced are NIH or AID funded. Those are the

products that seem to be getting the attention.

So if that is the case, why would the pharmaceutical industry engage? The pharmaceutical industry just needs to know what the

rules are and have them implemented. When BioShield was initially passed, many people in this industry were excited to produce

the next generation medical countermeasures. The fact that it has

been implemented with a lack of leadership and a lack of implementation and sense of urgency and a huge sense of bureaucracy

has basically killed the capital markets and the ability to raise

money to develop these drugs.

So if the capital markets and the companies that want to participate in this area are not incentivized, all the medical countermeasures are going to be dependent upon the NIH and taxpayer

dollars. So to answer your question, BioShield II would be great.

But I think most importantly, BioShield II needs to be implemented the way it was crafted.

Mr. DAVIS OF ILLINOIS. It could be that there might be opportunity for a different level of consultation with the industry or with

the pharmaceutical industry as the rules are being shaped, realizing that again, both sides have to be comfortable as well as protected, and of course, the American public is always afraid that

somebody is going to get a windfall out of something. So you don’t

want that to happen, either.

Would a different level of consultation perhaps be helpful in the

process?

Mr. HOLLIS. Possibly more open dialog, clear transparency and

guidelines, so that the people implementing the bill are directly

interfacing with industry representatives, so the process is transparent and everyone knows what is expected of one another. If we

are expected to be partners with the Government to develop these

medical countermeasures, then we need to be treated as partners.

There needs to be that dialog.

Also, sir, I don’t believe there is windfall. I believe that if you are

developing a medical countermeasure and spending your investor

dollars and taking those risks, and if your technology is good

enough to get FDA approval, and it can safeguard and protect the

American people and provide these medical countermeasures, those

companies should win.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman. I

have no further questions.

Mr. SHAYS. I thank the gentleman.

Ambassador, thank you for your patience.

Ms. WATSON. Thank you, Mr. Chairman.

I think this goes right to the heart of the comment I made about

our responsibility here to have the oversight to address the issues

that you are raising, Mr. Hollis. Are we providing the opportunity

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or are we going along with the provisions in the BioShield Act to

be sure it is implemented?

I think Dr. Epstein raises our vision on this whole thing. Are we

preparing for the moment? Are we laying an infrastructure for the

future? Every day something new occurs around this globe. I am

sure the threats are turning inward now. I have no doubt in my

mind that we will not witness some kind of biochemical attack.

I had an interesting experience coming in from Cuba. After I got

through Customs, the Customs agent ran behind me and said, were

you recently in the hospital? Yes, I had some nuclear exams, and

they picked up the radiation as I came through. Blew my mind. I

saw little red and amber and green buttons flickering, but I did not

know what it meant.

So I think it makes the case that we have to expand our vision

and we have to do oversight to see that we are getting what we

ask for. So I would like first, Dr. Epstein, to comment on what Mr.

Hollis has presented to us in terms of what their company has been

doing, thinking that Government would keep its word and allow

the marketplace to compete and do the research. Dr. Epstein.

Dr. EPSTEIN. I am not familiar with the details of Mr. Hollis’

case.

Ms. WATSON. You don’t have to be, but you hear the issue he is

raising.

Dr. EPSTEIN. Certainly the intent of the legislation was to stimulate our private enterprise, recognizing that the biotech and the

pharmaceutical industry had not worked very closely with the national security community. And it by and large did not like Government money very much.

So this mechanism was trying to stimulate a market which

would provide incentives closer to what they already operate on

and I think it is a very important question to investigate how well

the intent and the wording of that legislation is actually being implemented.

I am also struck by Dr. Fauci’s remarks earlier. Mr. Hollis has

a product, so the development work has been done. If we are starting with a need, I wish I had something to cure such and such, and

then you are starting out doing the science, we are a very long way

away.

As Dr. Fauci pointed out, even doing the research may not get

you to the range where you can use the BioShield mechanism, because we have to have an expectation within 8 years we will have

a useful product. And there may be some development work between the research that tells you, here is a possibility, and the certainty that lets you know that within 8 years, we think we can invest our funds, or a company can invest our funds and get there.

I have heard some attention paid to this gap between that. And

I think that bears looking. There may be a need for something besides NIH funding, besides BioShield to try and bridge things.

The last thing I would like to add if I may is, on the question

of how general versus how specific countermeasures are, and I just

want to get back to the question Mr. Issa asked on radiation countermeasures, it is true that one possible source of radiation is a

source outside, other than x-rays or gamma rays will irradiate peoVerDate 11-MAY-2000 12:10 Oct 11, 2005 Jkt 000000 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 D:\DOCS\23143.TXT HGOVREF1 PsN: HGOVREF1
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ple. In that case, an x-ray is an x-ray, so a countermeasure that

protects against that will be helpful against anything.

Another type of radiation exposure is when there is contamination that you breathe or you eat. That makes a tremendous difference in what it is, because if it is radioactive iodine, it will go

to the thyroid, if it is radioactive strontium, it will go to your

bones. There the countermeasure makes a great deal of difference.

So the fact that we have potassium iodide to protect against

some isotopes in nuclear power plants will do essentially nothing

for a radioactive dispersal device. And one has to worry about both

of those. So you need the general case, but also recognizing that

there are specifics.

Mr. HOLLIS. If I may answer part of that question.

Ms. WATSON. Please, Mr. Hollis.

Mr. HOLLIS. Dr. Epstein brings up a very interesting point that

is unrelated to radiological countermeasures. However, it is a point

worth noting, because our company was founded on the premise

that there are hormones that are signaling agents in the body that

can stimulate innate and adaptive immunity. We actually started

out in infectious diseases, we have conducted multiple phase two

clinical trials in HIV/AIDS, tuberculosis and malaria. We have established the fact that the product is active in all three areas. It

is the one drug for many bugs.

We were looking at a broad spectrum approach to infectious diseases over a decade ago. I have spent 30 years in this industry, and

I realized that we were running into problems with resistance to

antibiotics and resistance to infectious diseases. Our whole core

technology platform was based on stimulating innate and adaptive

immunity.

We have not even brought this technology to BioShield. It is actually a true bioshield. It is not going to be a cure for everything,

but it is certainly a very active drug that can be used to probably

defend against multiple pathogens.

But why isn’t that product being targeted for BioShield? Because

they have not identified a market for a broad spectrum drug that

would work against many pathogens or developed the models that

we can put our drug in to see if they work. There needs to be better

vision in regards to where we are taking BioShield in the future.

So I absolutely agree with Dr. Epstein and his broader vision, because we share it.

Ms. WATSON. Thank you so much. I would like to address a comment and question to you, Mr. Kramer. You testified that the Department of Health and Human Services has contracted to purchase 5 million doses of BioThrax, the licensed anthrax vaccine

manufactured by your company. You also stated that without a

firm commitment from the Department to purchase additional

quantities, it may be difficult for you to keep BioThrax production

facilities up and running.

Obviously the Government faces a difficult task in deciding

which biodefense products to purchase for the National Stockpile,

and in what quantities. As we have already heard today, a bioterrorist attack could come in the form of a number of different

agents, including ones that we cannot foresee today.

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Yet we must be ready now with access to sufficient quantities of

best measures currently available. This is the tension that the Department must manage on a day to day basis. I would ask you

about your ability to keep manufacturing the BioThrax without further commitment from the Department to purchase additional

quantities. I think that is where Mr. Hollis was going with his testimony as well.

Mr. KRAMER. Certainly. Let me try to touch on all those, starting

with your question in terms of how do we establish the sense of accountability for how BioShield is being implemented. I think you

really need to separate questions of science, as you heard some of

the earlier panel members talk about, versus policy. And it is not

my position necessarily to second guess the scientific decisions that

are being made by Dr. Fauci’s group or other people in a place of

authority or responsibility for that.

But I would question the policy that is being implemented. I

think this is where my suggestion that the scientific advisory committee or some group can certainly help you all with that. On the

policy side, it is pretty easy to get your arms around what is being

done strategically in terms of how we are addressing these threats.

We have signed a contract with HHS for 5 million doses of our

product. We are partially through the delivery of that order, probably a couple million doses into that. We have not supplied all of

those 5 million doses. But I think it is important to understand

that it has taken HHS almost 31⁄2 years to pull the trigger on putting the first dose of licensed product into the stockpile, and that

did not occur until 2 months ago.

So my concern is from a policy perspective, given the challenges

of operating biologic facilities in this increasingly compliant world.

Your question about how long are we willing to continue to do this

without a firm commitment from the Government, that is a very

touchy issue. We have been at this for almost 7 years now since

acquiring the facility in 1998. We have always put the U.S. Government’s requirement or potential requirement for BioThrax front

and center in terms of all the customers. We have looked at selling

the product commercially, both to foreign governments as well as

to other domestic customers. But we have always placed the U.S.

Government need for the vaccine first.

So obviously, we want to make sure that we are responsive to

that need. We also need to look at the commercial markets for the

product and beyond that we will have to make a very simple business decision whether it pays for our shareholders to continue to

operate a facility at significant cost on an ongoing basis when there

is not a commensurate commitment by the Government to order

vaccine.

The other issue that I will say is——

Mr. SHAYS. I need you to kind of shorten up your answer.

Mr. KRAMER. OK, just one last point. There is very clearly an acknowledged threat regarding anthrax. HHS and other folks have

determined that they need 75 million doses of vaccine in the stockpile today to protect Americans. Why are they not buying as much

of our product as possible while the experimental products and new

technologies, which are years away, have a chance to even prove

that they are going to be successful? That is my issue.

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Ms. WATSON. I know my time is up, Mr. Chairman.

Mr. SHAYS. If you have another question, go for it.

Ms. WATSON. I want to go through the Chair to Dr. Epstein. I

was very intrigued by your testimony, because you had the broader

vision. And I was hoping that we as a committee, subcommittee,

would request you to do a paper specifically on what we need to

do to meet the intent of the BioShield Act that you feel is needed.

Apparently the policies are not being implemented according to our

intent.

And I would like to see, Mr. Chair, if we could ask Dr. Epstein

to submit to us a paper—now, I tried to read through his testimony, but there is so much there. Maybe you can specifically give

us some guidance and direction.

Mr. SHAYS. That is a fair request. I don’t know how much time

it would take you to do it, but the pay is good. [Laughter.]

Dr. EPSTEIN. I will certainly try and be responsive. It is a tremendously broad question. But if there are a few insights I can

offer you, I will be happy to submit that.

Mr. SHAYS. Yes, maybe you can narrow it down a bit.

Dr. EPSTEIN. Mr. Chairman, on this point, I put this in my written statement, I refrained from saying it orally, but I cannot resist

this opportunity. The experience I have worked on in biological

weapons and biological proliferation I did as a member of an agency which worked for you, which worked for the U.S. Congress. I

was at the Office of Technology Assessment, working on biological

weapons issues.

That office was closed 10 years ago this fall, and I think for precisely the reason you brought that question up, you don’t just need

an individual behind a desk giving you individual views. I think

you need an institution, you need a group of people that work for

you and answer precisely that kind of question without any allegations of working for anybody else. I think that is something you

could very much use.

Mr. SHAYS. Thank you very much.

I am going to yield my time to Mr. Issa and let him ask some

more questions.

Mr. ISSA. Thank you, Mr. Chairman. I will be brief. I would like

to follow on what my colleague from California, Ms. Watson, had

started on. This is the, no surprise to you, this is the committee

on Government Reform. We are an interesting committee, because

we are mostly about oversight, unless it comes to where Government is not doing what we have already asked them to do. Then

suddenly we are a relatively, if not a very powerful, committee.

I think that we have hit on something here, I think Ms. Watson

even made it clearer, it appears as though we have some specific

problems in implementation of the law and for what reason is the

question that I am going to leave you with. You will have time to

answer, don’t worry about those bells or the man behind the curtain.

It appears to me, and I would like your comments and you are

free to disagree with me, it appears as though if you work with

NIH, if you are an organization in-house or out of house, but you

are already being funded by us, that you have the inside track on

follow-on solutions. If you are completely an outsider, meaning

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truly entrepreneurial and not entrepreneurial with Government assistance already, that you are on the outside and at a disadvantage.

Now, that seems to be Mr. Hollis’ statement, that this is part of

this, now we are going out fishing for something when a product

has already gone through part of the FDA process, and it probably

should be more about, is there any other product that is this far

along, because we need something sooner, not later, as we were

told by the earlier panel.

Is this your observation? I guess to each of you, but Dr. Epstein?

And you don’t have to be bad-mouthing the Government, but is

there an advantage inherent that is part of the problem?

Dr. EPSTEIN. I think part of what makes working for the Government difficult is that those who have done it before always know

that system better. Part of what BioShield wanted to do was to

open that up more broadly.

But I think again, taking a bigger view, many of the things we

are going to need to do nobody does. So it won’t be a matter of

whether there is an existing contract or a new startup. It is going

to be all new. So it is an interesting question, do the big pharmaceutical firms who have not been terribly interested to date, are

there additional incentives one can offer them to bring them in, or

is that a group which is not really nimble and flexible enough to

do what we need, and we have to go to a different strata?

So I think we have to recognize that track records are important.

But we also have to recognize that there may be things for which

there is no track record.

Mr. ISSA. Mr. Hollis.

Mr. HOLLIS. I think there are degrees to what I testified to and

to what your comments are about possibly some conflicts. Because

if you do receive a grant you are in and there is a lot of communication and dialog. If you don’t have a grant, you are depending

on the legislation to be implemented, because that is why a company like ours participates in it.

So the oversight is extremely important, because I think the committee would do themselves well to re-read the legislation and ask

yourselves, if you were industry, how do you interpret this. Because obviously, there is a misinterpretation in regard to how it is

written, how it is being implemented. And if the pharmaceutical industry is going to participate in this, and that is what the legislation is drafted and passed and designed to do, then it really needs

to examine how it is being implemented.

Mr. ISSA. Mr. Kramer.

Mr. KRAMER. I think certainly there is a clearer risk that happens. One can only look at how HHS announced the first contract

under BioShield to VaxGen when they very systematically laid out

how the award of an $877 million contract to this company was the

prototype of how BioShield should work, meaning you had intellectual property which was developed at USAMERID early on, it was

transferred to NIAID for mid-stage development and then it was

procured under BioShield. They trumpeted that loud and clear,

that was the poster child for how BioShield moneys were to be

spent.

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And while that may work in some instances, it should not be the

only way that BioShield works, which I think is what my colleague

Mr. Hollis and I are both saying, is that’s not the only way it could

work. Because industry is looking at the Government very closely

to see how they are acting in relation to BioShield. And when they

smell that there is something untoward going on, they will be very

cautious about investing their shareholders’ capital in areas of risk

where there is not commensurate return.

Mr. ISSA. Mr. Chairman, I think that gives us a pretty full picture. Our work is cut out for us. I would yield back.

Mr. SHAYS. Thank you, all three of you, for your testimony. I just

would say, if you have a 30 second ending that you just want to

put on the record, we will be glad to hear it. Otherwise, we will

adjourn. Is there any closing comment that any of you would like

to make?

Mr. HOLLIS. Maybe I can start. I would just please ask the committee to really use your authority in looking at the oversight of

the implementation of this. We would really like to see BioShield

work. It is important for this country’s safety and security. I think

it is the best way to produce medical countermeasures, and that is

unleashing the industry and innovative entrepreneurs and new approaches to diseases, with the full realization that unless we get

FDA approval and we deliver, the Government is not obligated to

pay us anything.

Mr. SHAYS. I think we got your message. And I think you can

be pretty sure there will be good followup.

Mr. HOLLIS. Thank you.

Mr. SHAYS. Dr. Epstein.

Dr. EPSTEIN. I’m not taking my shot, Mr. Chairman.

Mr. SHAYS. OK, thank you. Mr. Kramer.

Mr. KRAMER. Just one last comment, and that is, I think it is

critically important for there to be a higher degree of oversight and

accountability by the Government agencies in terms of following

through with BioShield. They need some help in terms of early and

mid-stage review of these critically important products. Otherwise

you are not going to get that well-rounded, mature, biodefense industry that is going to be a partner to the Government in the long

term.

Mr. SHAYS. Thank you, that is a nice way to end. We will conclude this hearing. Thank you, gentlemen.

[Whereupon, at 1:50 p.m., the committee was adjourned.]

[The prepared statements of Hon. Christopher Shays, Hon. Darrell E. Issa, Hon. Jon C. Porter, Hon. Carolyn B. Maloney, Hon.

Elijah E. Cummings, Hon. C.A. Dutch Ruppersberger, and additional information submitted for the hearing record follow:]

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